To Deflect Discrimination and Harassment Claims Businesses Must Effectively Deal With Employee Complaints

May 2009

Ira M. Starr, Esq.

The current economic crisis has led to a sharp increase in the number of job terminations and lay-offs throughout many industries. Past periods of increasing unemployment tells us that we can expect a corresponding increase in the number of harassment and discrimination claims from disgruntled employees and former employees, and that same experience tells us that we can take proactive steps to reduce the cost of resolving these claims.

The three main components of an effective damage control system are education, information and action.

Education. The most obvious first step is to educate employees about the Company’s policies on discrimination and harassment. We strongly urge our clients to adopt written guidelines and procedures which are communicated to every employee. The best way to handle this is by preparing an employee manual or handbook that lays out in plain language a section highlighting that the Company has an absolute policy in place prohibiting discrimination and harassment, and a process for making complaints about discrimination and harassment. If you don’t already have an employee manual, our Employment Law Department will be glad to assist you in preparing one. It is also helpful to periodically issue memos or bulletins reminding everyone of the Company’s policy.

Information. The second critical component is the obtaining of information. The existence of a formal information system is often the most persuasive factor in deterring or disposing of litigation arising from discrimination or harassment claims. It is axiomatic that the earlier you know of a problem, the more effectively you can handle damage control. In the employment area, where sensitivities and fragile egos are frequently involved, early intervention can often quickly and satisfactorily resolve the problem.

So how do you gain the information? A simple answer is (a) you ask; and (b) you listen. “Asking” means that every formal meeting with an employee (e.g. the annual review) should include a written performance review that includes a performance evaluation, salary recommendation, and a section for comment by the employee. The review should be signed by both the supervisor and the employee.

“Listening” also means the adoption of an effective complaint system. The definition of what constitutes an effective complaint system is really quite basic. It should be: (a) easily accessible and well-publicized so that every employee knows who to contact with a complaint and when to contact them; and (b) safe to the employee, so that the employee will be free from retaliation for making the complaint and the employee has the option of making a complaint to a neutral party, particularly if the regular contact person (usually the immediate supervisor) is the person who is engaging in the offensive conduct.

It is important to note that in litigation, the awareness and availability of an effective complaint system gives the employer a strong affirmative defense and under EEOC and Supreme Court decisions is frequently enough to constitute a “safe harbor” from harassment complaints.

Action. The final leg to this tripod is that the employer must reasonably act on the complaint. In delicate situations, we urge the clients to contact us immediately so that we can coach the management on the proper techniques to be used. First, the employer must promptly investigate the complaint by interviewing the parties and any witnesses. Detailed notes should be taken and a memo to the file prepared. The next step is to circulate reminder memos to the entire staff confirming the Company’s existing anti-harassment and anti-discrimination policies. Depending on the findings of the investigation, it is essential that the Company take some action, even if that action only involves having the two affected parties discuss their respective grievances. Of course, in more serious cases, corrective action, up to and including termination of the offending employee, should be taken.